San Francisco weighs takeover of electrical system

[October 24, 2008]  SAN FRANCISCO (AP) -- Nearly a dozen times over the past century, San Francisco voters have rejected ballot measures to support a takeover of the city's privately run electrical system.

But advocates of public power haven't given up their goal of wrestling control from Pacific Gas and Electric Co., and this year are linking support of the measure to combating global warming and securing energy independence.

Proposition H would amend the city charter to require that San Francisco get 51 percent of its electricity from renewable energy sources such as wind and solar by 2017, 75 percent by 2030 and 100 percent by 2040.

The ballot measure also would require the city's Public Utilities Commission to study ways to reach its clean energy goals, including a transition to a municipal utility similar to those run by about 40 other California cities, including Los Angeles and Sacramento.

The proposition would authorize the Board of Supervisors to issue revenue bonds to fund an acquisition of PG&E's San Francisco operations or construction of a new electrical system -- depending on what the study finds.

Under current state law, investor-owned utilities are required to generate 20 percent of their electricity from renewables by 2010, but PG&E and its counterparts in Southern California are expected to miss that target by at least three years, according to the California Public Utilities Commission.

"This is about switching on clean energy in San Francisco and holding PG&E and our city accountable for our energy future," said Julian Davis, who chairs the Yes on Prop H campaign.

While few oppose greater use of renewable power, the proposition is generating strong opposition, led by deep-pocketed PG&E, which says the measure could lead to a costly takeover of the city's electrical service and higher rates.

The two sides disagree on how much a switch to municipal power would cost.

PG&E, an investor-owned utility that supplies power to most of Northern California, estimates it would cost at least $4 billion to acquire its San Francisco operations, while Prop H supporters believe the transition would cost much less and pay for itself over time.

Supporters say the city could provide cheaper and more reliable electrical service than San Francisco-based PG&E.

"Ultimately, it will be very good for San Francisco ratepayers," said Aaron Peskin, president of the Board of Supervisors and a ballot measure co-sponsor, noting that the city has run its own water utility for years. "San Francisco can do a better job at less money because we're not in it to pay off our shareholders."

Nationwide and in California, ratepayers of publicly owned utilities pay "significantly lower" rates -- as much as 40 percent less -- than those of investor-owned utilities, said Jerry Jordan, executive director of the California Municipal Utilities Association.

"They don't take profits out of the system, so you're not paying stockholders," Jordan said, adding that he believes publicly owned utilities are more responsive to policy demands such as clean energy mandates.

Opponents are skeptical the city will be able to provide better and cheaper electrical service than PG&E, which estimates that San Francisco ratepayers will pay $400 a year more under a municipal utility.

They also say the measure would give supervisors a "blank check" to issue bonds to fund the transition to public power -- without allowing a public vote.

"This measure give the Board of Supervisors an extraordinary new power -- to issue revenue bonds in any amount without a vote of the people," said Eric Jaye, who manages the No on Prop H campaign.

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On the Net:

Pro: http://www.sfcleanenergy.com/

Anti: http://www.stoptheblankcheck.com/

[Associated Press; By TERENCE CHEA]

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